St. Paul to wipe out medical debt for 32,000 residents

St. Paul officials are sending letters to 32,000 people this week alerting them that their medical debt will be erased.

Residents didn't have to apply to be eligible. Instead, the city analyzed resident incomes and debt levels and prioritized those with the highest need.

By using federal American Rescue Plan funds, the city paired with the nonprofit, Undue Medical Debt, and M Health Fairview to wipe out $40 million in medical obligations. St. Paul Mayor Melvin Carter says the plan is aimed at giving support to debt-strapped residents.

"Every day, millions of Americans face the impossible choice between paying medical bills and covering their basic needs. Nearly half of our big bankruptcies are linked to medical debt, and nearly 50 percent of adults have delayed or skipped care due to debt," he said.

Carter said the city identified those who needed debt relief. They qualify if their medical debt is five percent or more of their income or they earn no more than four times the federal poverty level — roughly $120,000 for a family of four.

Ruth Landé with Undue Medical Debt, says residents will automatically see their debt erased. She said they're notifying eligible residents through the mail. She said people should be sure not to mistake the letter for junk mail and throw it away.

"People don't always look through their mail to make sure to look for that," she said. "For everybody else, let people know about this program so that people get the relief that we are providing."

Letters are expected to arrive in the next 10 days.

The city is working on additional rounds of medical debt repayments with other health systems.